It's actually really easy to create a watermarked version of an image using Imagemagick.

First, you need an image that you will use as a watermark. You can create this with Gimp, Photoshop, or any other image creation package.

Next, you merge this with your image using the composite command in Imagemagick. An example of this command is like so:

composite  -compose atop -gravity southeast watermarkImage.gif targetImage.jpg targetImage.jpg

This will place the watermark, contained in watermarkImage.gif in the lower right-hand (southeast) corner of the targetImage. Pretty simple.